This kind of demand for crude oil on the world market has not been remembered for a long time. As a representative of the International Energy Agency recently stated, the scale crises caused by the war in Iran it can be compared with two oil shocks from the 70s of the last century and the crisis from the beginning war in Ukraine. More precisely, those three crises from the past together are equal to this present one. NIS was not spared from that either.
Although NIS did not answer whose oil they are buying these days and how much the crisis in the Middle East affected the change in the usual way of buying, Forbes Serbia learns from a source familiar with the trade that it is oil from Norway, Guyana, Iraq, Kazakhstan, but also the United States of America.
Our source says that the current situation is such that everything that can be found on the market is being bought. With the exception of Russian oil, as it is prohibited by sanctions.
We were unable to find data on the import of raw materials even in the recently published financial report of NIS. Let us remind you that he revealed that the loss of NIS last year was 12,2 billion dinars, while when you look at the consolidated balance sheet, i.e. the subsidiary companies, that loss is 5,6 billion dinars at the level of the entire NIS group.
What do they say at NIS?
Forbes Serbia asked NIS the following questions: Do they have problems with the supply of crude oil due to the war and crisis in the Middle East? From whom does NIS currently buy oil and what is the price compared to the one before the start of the war? Are they having trouble getting the quantities they need? Will this situation affect the prices of petroleum products and to what extent?
In this company, our questions were answered by the following:
"In the conditions of the global crisis and macroeconomic circumstances on which NIS has no influence, business risks have also increased as expected. NIS continues to adjust its business models. We carefully monitor the development of the situation in the oil and oil derivatives market and take appropriate measures. And this with the aim of ensuring the stability of business, crude oil procurement and security of market supply," the national oil company replied.
"All gas stations of the NIS company operate regularly and are properly supplied with all types of petroleum derivatives. The sale of fuel takes place normally and without interruption. When it comes to the price of derivatives, the company respects all the decisions of the competent authorities, including the Decree of the Government of the Republic of Serbia on limiting the price of petroleum derivatives," the answer continues.
Our source confirms that the situation is not critical, but thanks to the fact that NIS has a modernized refinery that gives it a greater choice.
"Literally, it is bought wherever it is possible and whose oil is available, and it can be processed in the refinery in Pancevo," explains a Forbes Serbia well-versed source in the crude oil trade.
Where was oil imported from before?
According to data from the Energy Agency from 2021, Serbia covered 20,7 percent of crude oil from its own capacities, while 79,3 percent was imported. When looking at the structure of imports, according to those data, 64 percent of oil was procured from Iraq. About 23 percent came from Russia, 10 percent from Kazakhstan, while about three percent were imported from Norway.
Although the public believed, after the privatization of NIS by Gazprom, that crude oil came to NIS exclusively from Russia, this was not true. On average, Russian oil accounted for between a quarter and a fifth of total imported oil. Oil imported from Iraq dominated.
According to the same data, 3,234 million tons were imported into Serbia in 2022. The majority of crude oil imports, about 52 percent, came from Iraq, while the rest came from Russia and Kazakhstan. Let us remind you that due to the war in Ukraine and EU sanctions against Russia, NIS at one point increased the import of Russian oil. And from an average of about 23 percent to almost half. At the same time, the share of Iraqi oil imports decreased.
The situation changed with the sixth package of sanctions against Russia, when the EU banned the purchase, import and transportation of oil coming from Russia. At that time, Serbia did not get an exemption from the application of that measure, so the import of Russian oil was stopped.
Extended sale
By the way, on March 24, the day when the deadline for the agreement between MOL and Gazprom on the purchase and sale of the majority package of NIS shares expired, a new permit was received from OFAC. The Hungarian MOL announced that it received permission to complete this transaction by May 22. In other words, the negotiators were given two more months to come to an agreement.
A few days earlier, OFAC extended until April 17 the license to import crude oil to NIS. The assumption is that even after the expiration of this deadline, it will be extended until the new, May deadline for the exit of Russian ownership from NIS.
As Forbes Serbia wrote, the negotiations on the sale of the majority share in NIS are certain to have stalled. The reason for this could be found in the war in the Middle East, but also in the Hungarian elections, which are being held on April 12.
Even this time, however, MOL did not announce whether the Arab ADNOC is still in the game, or whether there is still the possibility that the two companies will form a joint venture that will be the new owner of the Serbian company.
Source: Forbes
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